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In a struggling economy, even a seemingly solid loan can turn bad quickly.
Without solid loan growth to boost revenues, banks are forced to rely on other activities.
For one thing, start-ups and historically solid loan originators are equally susceptible to market pressures that may alter their business practices.
While refinancing activity has been tapering off, home-buying trends remain strong, and Golden West should continue its solid loan growth.
Benefiting from solid loan and deposit growth, Riverview has delivered four straight quarters of at least 17% growth in per-share earnings.
Instead of unbalanced mono-product giants, MFIs like SKS might have grown up to look more like Mibanco in Peru, Equity Bank in Kenya or BRI in Indonesia, all with solid loan and deposit bases.
Similar(52)
But, as the Austrian central bank warned Friday, many banks owe their recent improvements in profit to trading results and central bank support, rather than from solid loans.
Iceland's financial regulator recently stress-tested its banks, and found they would still be solid after loan losses of 20percentt.
Some banks have argued that such limits do not take into account the quality of a bank's assets, and that institutions with gilt-edged assets — solid corporate loans or government bonds — should be allowed higher leverage ratios.
You can buy and sell not only shares, bonds and currencies, but any number of derivatives based on them; you can trade in insurance against the default of single companies or whole bunches of them; all manner of debt, from solid company loans to fragile subprime mortgages, can be syndicated or securitised, chopped into bits and sold on; and you can bet on myriad indices of all the above and more.
A wise policy for the United States would have been to demand that the banks forego any bonuses in 2009 and use the public monies as capital to make solid business loans that will create the millions of new jobs the nation requires.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com